Sunil Mittal Buys Over 6% Stake In CG Power

Billionaire Sunil Mittal has picked up a stake of over 6% in CG Power and Industrial Solutions. The acquisition was done through a series of market deals from March in the Gautam Thapar’s Avantha Group company, where lenders have recently revoked pledged shares of the promoters. The Bharti Airtel chief has bought the shares in his personal capacity for around Rs 150 crore, according to estimates based on data from the BSE and the NSE.

Shares of CG Power, which makes electrical equipment like transformers and switchgears, closed nearly 4% up at Rs 39 on the BSE on Thursday when the Shares of CG Power, which makes electrical equipment like transformers and switchgears, closed nearly 4% up at Rs 39 on the BSE on Thursday when the overall market fell Mittal has picked up shares through Bharti (SBM) Holdings, one of his personal investment arms. When contacted, a Bharti Airtel spokesperson declined to comment

The investment by Mittal comes as lenders, including asset management major KKR India Financial Services and L&T Finance, have recently revoked pledged shares in the company, taking a 21.6% stake. The shareholding of the Avantha Group, which has been selling assets to reduce group debt, has fallen from 34.4% to 12.7% during the March quarter.

CG Power was formed after a demerger of the consumer-facing business Crompton Greaves Consumer Electricals, where Avantha Group sold about 34% to private equity funds Advent and Temasek Holdings for Rs 2,000 crore in 2016 as a part of its de-leveraging exercise.

On March 10, CG Power had announced formation of an “empowered operating sub-committee chaired by an independent director to drive operational improvements” and “capital restructuring”. At that time, Thapar had said in a statement that the promoter group is working with lenders to create “value for all stakeholders and better evaluate options for value enhancement”. He had added that “the current value of CG Power does not reflect the intrinsic value of the company”. CG Power has a market capitalization of about Rs 2500 crore.―Times of India